Circle Internet Group — the New York-based company issuing the USDC stablecoin — cut about 5% of its staff in the third quarter. The information was disclosed in a footnote to the earnings report, which also recorded growth in key financial metrics.
Circle spent $9.1 million on the restructuring — mainly on severance payments and notices. The decision to cut staff coincided with a decline in the company's core income: Circle earns on interest from cash and Treasury bonds that back USDC. About 75% of the issuer's revenue comes from these interest incomes.
Why the cuts took place in a quarter of profit growth
In the report, Circle linked the cuts to the need to align the company's structure with its chosen strategy and operating model. Financial metrics nonetheless grew: net income from continuing operations rose 5% to $226 million, while total revenue and reserve income increased 17% to $865 million.
However, a significant portion of the growth was driven by a one-time inflow — $182 million from the presale of the Arc blockchain token, launched on September 16. Excluding revenue from ARC sales and other non-interest revenue, reserve income fell to approximately $658 million from $711 million a year earlier.
Circle's reserve yield dropped to 3.5%, which is 0.61 percentage points lower. Each Fed rate cut reduces the yield on the Treasury bonds that back USDC.
Will USDC growth cover rising expenses
At the end of September, the volume of USDC in circulation stood at $73.9 billion — the same as a year earlier. USDC's share of the dollar stablecoin market declined by 1.83 p.p. to 27%. Operating expenses rose 16% to $244.9 million. Circle maintained its guidance for annual adjusted expenses at $570–585 million, noting that the final figure depends on hiring.
The company has already carried out layoffs: in December 2024, "less than 6%" of employees were dismissed. AI is not mentioned in the current report, although in May CEO Jeremy Allaire said that 85% of employees use AI tools weekly. "We are only at the beginning of how AI agents will affect work and how this will play out in the labor market," he noted.
USDC distribution costs — interest paid to distribution partners — declined from $447.2 million to $409.2 million. The company's payment network showed $41.3 billion in annual volume, and Circle agreed to acquire the payment service Tazapay. The issuer still targets 40% annual USDC growth over several years, despite the stagnation in the coin's circulation.
Cryptalist analysis: Circle is balancing between cost optimization and dependence on interest income, which is vulnerable to Fed rate cuts. Stagnation in USDC volume amid rising operating expenses creates pressure on margins, while one-time inflows from ARC token sales mask the underlying dynamics. The resilience of the issuer's model will be determined by its ability to grow market share and diversify revenue beyond interest income.